New Venture Creation Solved
Exam Questions
Course Introduction
New Venture Creation explores the process of transforming innovative ideas into viable business enterprises. This course guides students through the stages of identifying opportunities, developing business models, assembling resources, and creating a robust business plan. Emphasis is placed on understanding the entrepreneurial mindset, conducting market analysis, securing financing, and addressing legal and ethical considerations. Through case studies, real-world examples, and practical assignments, students gain the skills and knowledge necessary to launch and manage successful new ventures in dynamic environments.
Recommended Textbook
Essentials of Entrepreneurship and Small Business Management 9th Edition by Norman M. Scarborough
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17 Chapters
1957 Verified Questions
1957 Flashcards
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Page 2
Chapter 1: The Foundations of Entrepreneurship
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) About 20 percent of downsized corporate managers have become entrepreneurs.
A)True
B)False
Answer: True
Q2) Approximately ________ percent of corporate managers who are "cast off" as companies downsize become entrepreneurs.
A)5
B)15
C)20
D)45 Answer: C
Q3) Increasing numbers of women are discovering that the best way to break the "glass ceiling" that prevents them from rising to the top of many organizations is to start their own companies.
A)True
B)False Answer: True
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Chapter 2: Ethics and Social Responsibility: Doing the Right Thing
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) ________ percent of all drug abusers are employed.
A)Forty
B)Fifty
C)Sixty
D)Seventy
Answer: D
Q2) Social responsibility is important only for large corporations.
A)True
B)False
Answer: False
Q3) Ethical behavior is doing what is "right."
A)True
B)False
Answer: True
Q4) The law is the narrowest level of ethical standards.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Creativity and Innovation: Keys to Entrepreneurial Success
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118 Verified Questions
118 Flashcards
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Sample Questions
Q1) Which of the following is not an enhancement to individual creativity?
A)Listening to other people.
B)Recognizing the creative power of mistakes.
C)Keeping a toy box in your office.
D)Working without breaks until the project is complete or the problem is solved.
Answer: D
Q2) Employees tend to rise or fall to the level of expectations entrepreneurs have of them.
A)True
B)False
Answer: True
Q3) Creativity often involves creating something from nothing. However, it is more likely to result in ________.
A)elaborating on the present
B)putting old things together in new ways
C)taking something away to create something simpler or better
D)All of the above
Answer: D
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Chapter 4: Conducting a Feasibility Analysis and Designing a Business Model
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) An effective tool used to help assess ideas is the ________.
A)idea toolkit
B)idea dashboard
C)idea sketch pad
D)idea metric
Q2) A(n)________ trial involves sending researchers into customers' homes to observe them as they use the company's product or service.
A)in-home
B)prototype
C)windshield
D)focus group
Q3) One form of primary research is ________.
A)to review published articles
B)Internet research
C)library research
D)a focus group
Q4) How does a company such as Under Armour control the bargaining power of its suppliers?
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Q5) How important is a prototype for Andy Sycamore to succeed with his "Nested Learning?"
Chapter 5: Crafting a Business Plan and Building a Solid Strategic Plan
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) The conditions surrounding a loan request typically never affect the owner's chance of receiving funds.
A)True
B)False
Q2) In terms of quality, which company has the weakest competitive position?
A)Your company
B)Competitor 1
C)Competitor 2
D)Impossible to tell from the information given.
Q3) A small company's mission statement ________.
A)establishes its purpose in writing
B)gives the business and everyone in it a sense of direction
C)defines what the company is, why it exists, and its reason for being
D)All of the above
Q4) Strengths are positive internal factors that contribute toward accomplishing the company's mission, goals, and objectives.
A)True
B)False
Page 7
Q5) Explain at least two functions or purposes of preparing a business plan.
Q6) What is a competitive advantage? Does Cherry Lane have one? If so, what is it?
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Page 8
Chapter 6: Forms of Business Ownership
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) What is a partnership? Explain the advantages and the disadvantages of a partnership.
Q2) Would a limited liability corporation be any better for Duke? Why or why not?
Q3) In the ________ form of ownership, the business itself pays income taxes.
A)proprietorship
B)partnership
C)corporation
D)All of the above
Q4) Which of the following is a disadvantage of the corporation form of ownership?
A)An inability to accumulate capital.
B)The unlimited liability to the members of the board.
C)Double taxation on profits.
D)The lack of continuity.
Q5) Each partner in a limited liability partnership is a limited partner; there are no general partners.
A)True
B)False
Q6) What is an S corporation? Explain the advantages and the disadvantages of an S corporation.
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Q7) What factors should an entrepreneur consider when choosing a form of ownership?
Chapter 7: Buying an Existing Business
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) What should the new owner do to avoid a bumpy transition?
Q2) The letter of intent is a ________ document.
A)binding
B)nonbinding
C)transferable
D)final
Q3) The majority of the deals make it from the letter of intent stage to the final closing.
A)True
B)False
Q4) A principal advantage of buying an existing business is the purchaser's ability to rely on the previous owner's experience.
A)True
B)False
Q5) The letter of intent is a nonbinding document.
A)True
B)False
Q6) Book value is the same as market value.
A)True
B)False
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Chapter 8: Franchising and the Entrepreneur
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) Most franchisees are better educated, more sophisticated, have more business acumen, and are more financially secure than those of just 20 years ago.
A)True
B)False
Q2) Pure franchising involves a system of franchising in which a franchisor sells a franchisee a complete business format and system.
A)True
B)False
Q3) Chris Jaffe, the owner of a small independent doughnut shop, is worried that a large doughnut franchise will open an outlet near her location and take away business. Taking a proactive approach, Jaffe contacts the franchise, and after a few months of negotiations, becomes a franchisee. Jaffe is an example of which trend in franchising?
A)Cobranding
B)Conversion
C)Master
D)Subfranchising
Q4) Explain three trends that are currently shaping the franchising industry.
Q5) Outline the recommended procedure for buying a franchise.
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Chapter 9: Building a Powerful Bootstrap Marketing Plan
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Which of the following is not a secondary source of market research data?
A)Census data
B)Trade publications
C)Focus groups
D)Magazines
Q2) Which of the following is a way to improve customer service?
A)Encourage customers to complain.
B)Ask employees for feedback on improving customer service.
C)Develop a service theme that communicates the importance of customer service in the company.
D)All of the above
Q3) Research shows that repeat customers spend ________ percent more than new customers.
A)5
B)52
C)67
D)97
Q4) Faith Popcorn offers several ways Lloyd Dixon could collect information about his customers and competitors. Explain at least five of those ways.
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Chapter 10: E-Commerce and the Entrepreneur
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142 Verified Questions
142 Flashcards
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Sample Questions
Q1) A successful Web site should include all of the following characteristics except
A)a FAQ section
B)continuous automated music that cannot be cut off
C)updated and timely information
D)readable font sizes
Q2) More than 75 percent of small business owners have Web sites.
A)True
B)False
Q3) Responsible online merchants should make sure shipping and handling charges are
A)reasonable
B)displayed early in the buying process
C)easy to find
D)All of the above
Q4) To launch a successful Web site, business owners should consider ________.
A)a simple design that is easy to navigate
B)that to stand out on the Web, the site really has to sparkle
C)all the "bells" and "whistles" technology can provide
D)that flash makes a Web site better
Page 13
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Chapter 11: Pricing and Credit Strategies
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) A technique offering customers discounts if they purchase in quantity is referred to as ________.
A)optional product pricing
B)bundling
C)multiple-unit pricing
D)customized pricing
Q2) For most service firms, labor and profit comprise the greatest portion of the cost of the service.
A)True
B)False
Q3) An entrepreneurial company can differentiate itself by creating a distinctive image in customers' minds or by offering ________.
A)superior service and quality
B)exceptional design and convenience
C)speed and performance
D)All the above
Q4) For most products, there is an acceptable price range, not a single ideal price.
A)True
B)False
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Chapter 12: Creating a Successful Financial Plan
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140 Flashcards
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Sample Questions
Q1) Slow accounts receivable are a real danger to a small business because they often lead to cash crises.
A)True B)False
Q2) Concerning how much cash to have at startup, one rule of thumb is to have enough to cover operating expenses (less depreciation)for two inventory turnover periods.
A)True B)False
Q3) Creating projected (pro forma)financial statements would allow a business owner to answer which of the following questions?
A)What profit can my business expect to achieve?
B)What sales level must my business reach if our targeted profit is X dollars?
C)What fixed and variable expenses can my business expect to incur at our targeted sales level?
D)All of the above
Q4) Why is it important for an entrepreneur, about to launch a business, to perform a break-even analysis? Describe the steps in calculating it.
Q5) Were the bankers correct? Do you think Jim should expand the business?
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Chapter 13: Managing Cash Flow
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Sample Questions
Q1) A collection agency typically takes ________ percent of the amounts they collect on past due accounts.
A)5 to 10
B)10 to 20
C)25 to 30
D)30 to 50
Q2) When investing surplus cash, the small business owner's key objectives should be on the ________ of the investment.
A)high yields
B)current income
C)liquidity and safety
D)long-term yield
Q3) It is considered unethical for small business owners to regulate payments to their company's advantage.
A)True
B)False
Q4) Only about 20 percent of a typical business' inventory turns over quickly.
A)True
B)False
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Chapter 14: Choosing the Right Location and Layout
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Sample Questions
Q1) When choosing a state in which to locate, one must evaluate which of the following?
A)The general business climate
B)The state's business laws, regulations, and taxes
C)Tax incentives and/or investment credits
D)All of the above
Q2) The index of retail saturation for site #2 is $________.
A)164.27
B)140.83
C)170.64
D)146.30
Q3) A Geographic Information System (GIS)________.
A)is a software package combining the ability to draw detailed maps with the power to search through databases
B)helps entrepreneurs discover important trends and characteristics in the population that otherwise might go unnoticed
C)can be an incredibly powerful tool for determining the ideal location based on specific criteria the entrepreneur establishes
D)All of the above
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17
Chapter 15: Sources of Financing: Equity and Debt
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Venture capitalists look for ________ as the most important ingredient in the success of any business.
A)innovation
B)a growth industry
C)a competitive edge
D)competent management
Q2) Most entrepreneurs seeking money to launch their businesses need more than $1,000,000 in startup capital.
A)True
B)False
Q3) Entrepreneurs needing between $100,000 and $3 million in the current financial environment will likely find acquiring financing to be ________.
A)challenging
B)confusing
C)attainable
D)easy
Q4) The average loan in the SBA's Microloan Program is $100,000.
A)True
B)False
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Chapter 16: Global Aspects of Entrepreneurship
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133 Verified Questions
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Sample Questions
Q1) Identify and discuss the domestic barriers to trade.
Q2) All of these are steps small companies follow when they begin conducting global business on the Web except ________.
A)connecting to e-mail
B)building a globally-accessible Web site
C)setting up links to related company Web sites
D)using the Web to conduct international market research
Q3) Unlike an EMC or an ETC, manufacturers' export agents act as international sales representatives in a limited number of markets for various noncompeting domestic companies, typically operating on a commission basis.
A)True
B)False
Q4) Currently, the World Trade Organization (WTO)has 164 member countries that represent over ________ percent of all world trade.
Q5) Identify and discuss the international barriers to trade.
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Chapter 17: Building a New Venture Team and Planning for the Next Generation
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119 Verified Questions
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Sample Questions
Q1) Small companies are least likely to make hiring mistakes because most owners have developed clearly defined job specifications and job descriptions.
A)True
B)False
Q2) A job ________ identifies the duties and responsibilities of a position and its working conditions, while a job ________ identifies the qualifications required of the job candidate in terms of skills, education, and experience needed.
A)specification; description
B)description; specification
C)analysis; specification
D)analysis; description
Q3) Although many business owners see checking references as a formality and pay little attention to it, the process is ________.
A)expensive and often meaningless
B)necessary and often invaluable
C)optional, based on the position's salary and relative importance
D)a questionable practice that may bias the hiring process
Q4) What is leadership? How does leadership differ from management?
Page 20
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